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Written by:
Bas Hollenberg


Awarding of severance pay

The Sub District Court upon an employer’s request may terminate the employment contract with a particular employee on condition that the employer should have reasonable grounds for termination while not being in a position within a reasonable period of time to reassign the employee. The Netherlands Civil Code contains an exhaustive enumeration of “reasonable grounds for termination (of employment”, one of these being disagreement on the way in which the employee should interpret and carry out his or her duties to the point where it has caused the employment relationship to go sour.

Termination of employment contract typically entitles the employee involved to a transition allowance irrespective of how the employment contract is being terminated. Whereas the Sub District Court in the days prior to the implementation of the Work and Security Act of the Netherlands was authorised to direct that the employee should be compensated in a particular amount, under the new regime this is no longer possible unless the employer has been found to have committed grave imputable act vis-à-vis its employee. The Sub District Court moreover is no longer authorised in the event of the employer and employee together having reached agreement financially to award compensation to the employee. The best the Court can do in the context of an employment termination ruling is direct that the employer is to pay compensation to the (dismissed) employee, without reference to the actual amount.

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